Business Irish

Wednesday 21 February 2018

ING executive in frame to replace CEO Boucher at Bank of Ireland

AIB to file flotation papers by the end of May

The Bank of Ireland headquarters in Dublin
The Bank of Ireland headquarters in Dublin
Richie Boucher

Gretchen Friemann

The outgoing chief financial officer of Dutch banking giant ING is being considered as a candidate to replace Richie Boucher as the head of Bank of Ireland, the Irish Independent understands.

The bank, and Patrick (PG) Flynn, who is based in the Netherlands, declined to comment.

While Liam McLaughlin, who leads the bank's retail operations, remains the favourite internal contender, alongside cfo Andrew Keating, speculation is rife that the board may have set its sights on hiring an outsider as the rescued lender pursues a lower-cost, digitally-focused business model.

The banking salary cap here is still seen as an obstacle to high-profile external candidates, however.

Mr Boucher's total pay hit €958,000 last year, far above the government-imposed €500,000 pay cap for executives at bailed-out banks.

It would still represent a sharp fall in salary for Mr Flynn, who earned €1.2m in base pay last year, according to ING's annual report - a figure that was buttressed by a further €217,000 worth of shares.

Dublin-born Mr Flynn officially retired from ING yesterday following the group's annual general meeting in the Netherlands. While the Dutch heavyweight announced the move earlier this year, it is understood Mr Flynn has yet to accept a position elsewhere - which could leave him free to take the Bank of Ireland job.

Despite the pay discrepancy, the Government has cleared the path for an external candidate to claim a similar salary to Mr Boucher.

"If they appoint somebody significant from outside, I think the parameters for negotiating pay will be somewhere in line with Mr Boucher's case," Finance Minister Michael Noonan said last month:

According to industry sources, Mr Flynn's expertise and knowledge of internet banking is likely to represent a key attribute to the board.

ING, like all European banks, underwent a painful restructuring after the financial crisis and has since outpaced its peers in the shift to digital banking.

The lender posted better-than-expected profits in its latest results, partly driven by strong growth in ING Direct, its online banking business.

The gains from Bank of Ireland's massive €800-€900m investment in a new digital platform however remain unclear and analysts have argued uncertainty about the impact of the online strategy and its higher-than-anticipated cost continues to weigh on the share price.

Meanwhile, the results of the French election have given an extra push to AIB's planned return to the stock market - which could now happen within weeks.

The State-owned lender's management team, led by Bernard Byrne, travelled to the US again last week to meet another group of potential investors, as part of a so-called non-deal roadshow.

While Mr Noonan has previously denied the UK election represents a roadblock to AIB's partial privatisation, it is understood the Government intends to pull the trigger on a float at the end of May.

Sources said that would result in a stock market debut at the end of June or start of July.

It would also free investors from any distractions over the UK elections, which are widely predicted to result in a landslide victory for the governing Tory party.

Irish Independent

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